There are currently a lots of sites that are penny auctions. These sites promise bargains if you buy bids instead of sites like eBay and there is no time limit as when it goes to 1 second it could bounce back to 16 seconds, because thats how it works, but these sites should be avoided, because they might not actually always save you money.
First, the company always makes a profit from the products it sells. Bids usually cost 60 cents per bid, but they only sell it in a bid package. They won't let you bid until you buy a package. Sometimes winning something like a PS3 or a GPS might take 150-300 bids. Thats about $180 worth of bids + shipping + the cost. This makes the price the same as retail or even more. Sometimes things like an iPhone 4 it can take 2000 bids which cost $1200 in bids and other people who bid. This phone is actually only worth $899 so technically your overpaying for something you thought was cheap.
Second, the bids are sometimes non-refundable. This means if you spend this many bids on this item and you don't win it, you won't get it back. So that means you spent $100 on bids, but got nothing so it isn't it a waste of money. You would have better luck on eBay.
Third, sometimes the site is a fake. Take a site like Swipebids which charges you $39 to register and you don't win anything. The employees bid on the items to prevent you from winning and buying more bids. They want you to get bidding fever. This makes you keep on bidding and the testimonials are from employees, not real customers. These testimonials are fake not real and if you look when it says Swipebids was in the news, it is actually Qubids. Swipebids copied Qubids. Qubids is real, but Swipebids is a real scam.
Penny auctions aren't all that great. You'll probably have a low chance to win anything. I'd rather go on eBay where bidding is free. This means you don't lose anything if you bid. Also it's real, not fake. Penny auctions can be great, if they're real.
The main risk associated with online penny auction is that it is mostly assumed to be a regular auction. Users or players with less knowledge of auctions may therefore apply poor judgment while making bids. The site makers themselves make the users easy target by intermixing normal or authorized ads with the unauthorized ones. Also the legality of this auction provides the sites to get out of such matters easily. Thus adequate knowledge of bidding should be acquired before doing the same.
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